Metals Shine Ahead of the Fed’s Expected Cut

In the runup to the likely cut to rates by the Federal Reserve (‘the Fed’) on 10 December, gold and silver have remained strong amid ongoing high demand. Repeated short squeezes for silver have contributed to a gain of around 100% since the start of 2025. This article briefly summarises recent news and data, then looks at the charts of XAUUSD and XAGUSD.

After considerable fluctuation in probabilities last month, participants seem to have decided on expecting a cut by the Fed on Wednesday, 10 December, to 3.5-3.75% with a probability of around 85% from CME FedWatch. A cut isn’t quite as certain as it had been in October, but it’s still very likely. The large majority of around 80% of participants also expect at least two cuts in 2026, with some probability of three in total next year, although the timing of these isn’t clear yet.

Broadly speaking, it’s positive for precious metals that the Fed appears to have some justification from data for cutting as opposed to being pressured politically into doing so. The job market in the USA is overall clearly weaker than it was in spring, with the latest data from Challenger showing about 71,000 jobs cut in November:

Although the number of layoffs last month declined compared to October, they were still significantly higher than the same month last year. A total of about 1,171,000 jobs have been announced as cut in the USA in 2025, the highest year-to-date since 2020. A weaker job market usually suggests lower consumer spending and inflationary pressure, giving the Fed room to cut rates if appropriate and often leading to gains for non-yielding instruments such as gold and silver.

Away from economic data and rates, there’s been some support for gold from geopolitics as Russo-Ukrainian negotiations mediated by the USA haven’t yet led to any clear agreement. For now, an imminent end to the war seems unlikely. After a series of negative reports in various media around the middle of November about the high valuations of AI and related companies, this narrative has declined in the last couple of weeks and most major indices have recovered since about 20 November.

The focus for precious metals is likely to remain on monetary policy, economic data, and perhaps most importantly, demand. Beyond the Fed’s meeting on 10 December, traders are looking ahead to the double NFP for October and November on 16 December and American inflation on 18 December.

Gold Seems Hesitant Around $4,250

Gold has posted a slight overall gain since the end of November as expectations for moderately dovish policy from the Fed solidified and the outlook for the American economy still looks less positive compared to most of the first half of 2025. However, stock markets have generally recovered since the middle of November, so the general appeal of havens isn’t very high.

The long-running, strong uptrend has paused since the middle of October, but certainly doesn’t seem to have ended. Buying volume spiked around the large down days in October and has remained generally high since then. Overbought conditions also dominated a lot less last month, while in December so far, there’s been a mostly consistent signal of buying saturation from the slow stochastic.

$4,250 was rejected in November and seemingly again on 1 December, so this area seems like a possible short-term resistance. Above there, the record highs around $4,365 could be another resistance, and in the longer term, the 61.8% weekly Fibonacci extension around $4,600 would probably cap gains at least temporarily. The area around $4,000 and slightly below is an obvious support, but if the price moves down, there’s first the narrow value area between the 20 and 50 SMAs.

Silver Might Continue After a Record Monthly Gain

Silver is likely to be 2025’s best performing major CFD after a series of short squeezes, record inflows to London and generally tightening supplies around the world. Monetary policy remains in focus, with the Fed very likely to cut on 10 December and most participants expecting two or three cuts in 2026.

The 261.8% monthly Fibonacci extension, which coincides with the dynamic support of the 100 SMA, is likely to be an important area in the event of a deep retracement. The main short-term supports are likely to be dynamic, the 20 and 50 SMAs.

Current strong overbought signals from Bollinger Bands and the slow stochastic might make it risky to buy in immediately. $60 as a round number is an obvious candidate for resistance; beyond this, the 423.6% monthly Fibo around $63.15 is another. Given volumes for CFDs, spot deliverables, and futures, gains are likely to continue overall, but finding a good entry so close to the highs might be challenging.

This article was submitted by Michael Stark, financial content leader at Exness.

For the latest analysis, ideas for trading and more, follow Michael on X: @MStarkExness.

The opinions in this article are personal to the writer; they do not represent those of Exness. This is not a recommendation to trade.